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A credit card is a form of loan, albeit one involving more flexible terms and smaller sums of money than a personal loan or a mortgage. However, like other types of loans, credit cards also have interest rates. You need to understand more about how interest rates work, and how they will affect you and your finances, before taking out a credit card.

Why interest rates can be confusing

At the moment, credit card issuers can choose one of 14 different methods for charging interest. These methods involve calculating interest in different ways. So, if you have two credit cards which seem to have the same interest rates and you use them in exactly the same way, one could cost you more because the provider has decided to use a different method to work out that interest.

APR

Another reason why interest rates are confusing is because the industry uses acronyms such as APR to talk about interest. APR (Annual Percentage Rate) is a standard way to work out the cost of credit, taking into account the interest rate and any other charges. This rate shows you how much it will cost to borrow money over the course of a year.

It should be the case that credit cards with lower APRs give you the best deal, but it doesn’t always work out that way. This is because many cards start and stop charging interest on transactions at different times. However, most lenders offer a ‘typical APR’ when advertising credit cards. This is because when you apply for a credit card, you may be offered a rate based on your credit history and personal circumstances. According to a Guardian factsheet, banks only have to offer their advertised APR or a better rate to 66% of potential customers.

When interest rates will affect you

If you pay your balance off in full every month, you probably won’t need to worry about interest rates. However, interest rates will affect you if:

You only make minimum payments off your total balance every month
You pay anything less than the full balance each month
You use your credit card to take money out of a cash machine

If you meet any of these criteria, you should be looking to find the lowest interest rates when carrying out a credit card comparison. If you do your research and take the time to work out how much a credit card will cost you in the long term, you are likely to end up with a good deal and a way of borrowing money that suits you.

Although your bad credit score can sometimes feel like a rain cloud looming over your chances for financial freedom, there are opportunities for the sun to shine through. It’s not all bad news when it comes to your poor credit score, because despite common misconceptions, you can receive a credit card, apply for student loans, and access emergency cash. And the best part of all is that it is always possible to repair your credit score.

Credit Card Options

Applying for a credit card is a great way to build your credit, but unfortunately your bad credit score can limit your credit card options. Don’t be discouraged though, because there are multiple ways in which you can still receive a credit card despite your low score.

People with bad credit often take the secured credit card route. A secured credit card functions much like an unsecured credit, but you pay a security deposit and a monthly fee. You also will most likely experience a lower credit line, which reflects the value of your cash deposit. Only consider this option though if you can pay your monthly dues, otherwise you will very quickly rack up late charges and high interest.

You can also apply for a credit card with a cosigner who has a good credit score. It’s important however that both you and your cosigner understand that if you fall behind on payments, your delinquency will affect not only your credit score, but also your cosigner’s credit score. You won’t want to jeopardize your cosigner’s score on top of your own, so refrain from involving a cosigner if you are unable to make timely payments.

Students Loan Opportunities

Fortunately, you’re not out of luck when it comes to financial aid for higher education. Although you may not qualify for all loans, you do have options.

One option you can turn to is a private student loan through lenders such as Chase, Citibank, and Wells Fargo. In the same way that you can apply for a credit card with a cosigner, most of these lending houses will require a cosigner with an upstanding credit score. In this case, the cosigner agrees to pay for the loan if you fail to make payments. These loans are often associated with higher interest rates though, so only sign on if you understand all of the terms and conditions.

You could also apply for scholarships and grants to receive funds for school. Institutions will award you scholarships based on your athletic or academic performance, while they link grants to your financial situation and need. Scholarships and grants are more attractive options because they are monetary gifts, which you do not repay.

Emergency Loans Access

While your bad credit score will make it difficult to take out traditional loans from banks and lenders, there are bad credit loans, which can help cover life’s unexpected emergencies. Payday Loan lenders usually do not review your credit report, but they do generally expect you to repay the loan by the following payday. Failing to meet payment deadlines will result in expensive fees and high interest, so it is best to only take out this loan if it’s a one time situation, if you understand the terms of the loan, and if you are able to repay the loan.

You Can Always Improve Your Score

It’s never too late to start building your score, and because it can take years to recover from financial delinquency, it’s best to start fixing it now. Begin by repaying any debt that you owe. This may mean contacting your creditors to establish repayment plans, but be sure to demonstrate your willingness to pay back the money.

While you will want to continue using your credit cards to build your credit, use them sparingly and only for small purchases that you are capable of paying on time. In addition to paying your credit card bills on time, you should strive to pay your rent, utilities, and any other bills on or before their due dates as well.

Make a conscious effort to cut back on spending, save money, and consider consulting financial advice if your finances seem unmanageable. Bad credit is not a permanent situation, so take the time to improve it so that you can experience a brighter financial future.

Chloe Mulliner is a writer and editor for several consumer websites related to credit and personal loan options.

There’s a lot of buzz about the implications of bad credit and the importance of maintaining good credit, but many of us are still unclear about certain aspects of our credit reports. How long does a bad payment last on your record? Can you receive a loan with no credit history? And what about your job, is it really legal for an employer to snoop at your credit report? The following top three things you should understand about your credit report will answer all of those pressing questions and more.

1. Bad Credit Will Hang Around

Your credit history from today and two years back accounts for around 70% of your credit report, while the other 30% dates back seven to ten years. Good credit can hang around for around ten years while your last payment delinquency may show up for seven years. This is important to keep in mind, because one bad payment can haunt you for years, despite the fact that you’ve maintained a clean record ever since.

With that being said, your credit score can change on a day-to-day basis for various reasons such as if you apply for a new credit card, declare bankruptcy, or miss a payment. Generally though, your score will not change more than 30 points in one quarter. In addition, your credit score may vary depending on which of the credit bureaus reports your score, as each has their own scoring methods.

2. You Can Still Receive Loans With Bad or No Credit

If you have poor or no credit, there are options available that may prevent banks and lenders from turning down your loan request. eCredable.com, for example, offers you an All My Payments (AMP) credit rating, which takes into account your monthly payment obligations such as rent, utility, and cell phone bills to help establish your creditworthiness. These kinds of payments generally do not show up on the traditional credit bureau reports, but they can provide proof of your payment history. Some, but not all lenders will accept this form of nontraditional credit worthiness.

In the case of an emergency, you can apply for loans for people with bad credit. Typically, these bad credit lenders do not ask to see your credit report, so it usually does not matter if you have bad or no credit. But because payday lenders are taking a risk by supplying you with a loan, they do charge high interest rates and fees. Only apply for a cash advance if it is an emergency situation and if you are capable of paying back the loan in short order. Also, read and understand all of the loan terms before applying.

3. Your Future Employer May Judge Your Credit Score

While it’s not uncommon for credit card companies and landlords to check out your credit report, now potential employers are gathering around to sneak a peek too. And yes, it is perfectly legal for them to do so. A 2010 Society for Human Resource Management survey revealed that 60 percent of employers conduct credit checks on prospective job candidates.

These employers are using your credit score as a judgement of your character and financial reputation. Employers, especially those in financial fields, want to determine your level of monetary responsibility before allowing you to handle company finances.

Even though a bad payment can stick around on your credit record for a while, this should not discourage you from taking strides to improve it. And regardless of whether you can still borrow money from a lender with poor credit, your future employer may want to see your score, so you should always build your score to the best possible number to help prevent any possible obstacles. If you’re still experiencing uncertainty when it comes your credit score, do not hesitate to contact a financial advisor or credit counseling organization.

Payment Protection Insurance is an insurance typeproposed by lending corporations to individuals to help defend their loan and credit payments in case the individualscannot make the planned payment. PPI is intended to pay the debt if the individualloses his/her job, meets with an accident that prevents from working, or any sort of severe medicalissue. PPI differs from company to company. Like all sorts of insurance, PPI offers range of advantages.

Individuals, who are engrossed in buyingPPI,should go through the terms and conditions before moving forward to signing a PPI agreement.

Payment protection insurance is intended to keep off the debts if you’re unable to work due to some accident or some permanent disability. The PPI Claims would help you pay the regular amount of money to cover your loans and mortgage payments credit and store card payments. The lender company would pay the monthly payments for duration of twelve to twenty four months or until you get fit enough to start working again.

Other benefits of PPI claims are:

The PPI Company provides beneficiaries of payment protection to the customer. This would ease customer’s burden in the tough financial situation with minor extra fee that would be later added in your loan payment amount.

Even if the individuals are working and in good position with the PPI company can qualify easily for PPI. The details of PPI information along with billing statements are mailed to individuals so that can keep track of payments. The service to ask questions about the bills to online customer service is another facility provided by the lending company nowadays.

Most credit card companies and lending companies mail out PPI information with monthly billing statements. They may also offer the service to customer when they call in to make a payment or with questions regarding their bills.

Another facility provides by lending companies is the instant coverage. As soon as the individual agrees with the terms and provides the supporting documents, the PPI insurance is executed immediately. Some of the insurance companies offer waiting period of 4 months. The duration varies from lender to lender.

The money problems of the individual can be eased during the tough job times like during the recession or job uncertainty period or during the times when you could grab another job.

At times you invest all of the money in loans for your dream house or cars with some or almost no savings PPI claims can work leaps and bounds and help you escape the difficult financial circumstances without giving up your house or car dream. The PPI lending companies have come up with various facilities. It is up to you to select the one that suits you the best in the current situation.

Building your credit is not easy and should be a task that is not taken lightly. There are many different ways to build credit and you should be aware of which ways are effective and which ways are not. No one really knows the formula that the credit bureaus use to come up with a person’s credit score but there is enough knowledge that the financial professionals have created some tips for building credit.

This rest of this article will give you some simple tips of how to build your credit. Of course if your credit is clean improving your score will take no time at all. However if your credit score is in the poor category improving will take some time.

Get A Secured Credit Card

If you have a bad credit rating or no credit at all an unsecured credit card may be difficult to receive. This is where a secured credit care may come in handy. Even though these cards are secured with your own money they are still reported to the credit bureaus so if you use the card correctly and continue to pay your score will rise.

Have A Cosigner For A Loan

Another way to establish credit if you have bad credit or no credit at all is by applying and receiving personal loans for bad credit with a cosigner. A cosigner is someone who will sign on the loan and will be responsible for the loan in the case of you defaulting on the loan. As long as the payments are made on time and you follow the terms of the loan your credit score will improve.

Check Your Credit Reports

This is probably an obvious tip but if you are aware of where you are currently standing when it comes to your credit score you will know what it will take to build better credit.

Open A Personal Bank Account

Often times a personal bank account is overlooked. This is because the bank does not report to the credit bureaus. However if you keep your account in good standing and have a good history with your bank it will be easy to get instant payday loans through the bank that will offer a good interest rate.

Understand Your Credit Score

What this means is that you need to know how your credit scores are formulated. Once you know that you will be able to do what needs to be done to build your credit history. You will know if you need to get a credit card to help raise your score or a personal loan of some sort.

Keep Your Credit Cards Open

If you are trying to build your credit closing your credit card accounts will decrease your credit score. It is important to know that even if you are not using your credit card just having it on your credit file will increase your credit score. However it is best to use your credit cards but keep the balance on them low.

Pay Your Bills

Believe it or not if you do not pay your monthly bills even your utility bills can ruin your credit history. These will be reported to the credit bureaus if you default.

Do Not Apply For Loans or Credit Cards

This is a pretty obvious tip. If you do not need a loan or a credit card do not apply for one? Every time you apply for one of these forms of credit it will lower your score.

Cut Up Your Credit Cards

Rather than close out your credit card accounts to keep yourself from using them it is a better idea to cut them up. By not having the access to them the account will stay open but will have a balance of nothing on them because you will not be using the card.

Use Your Credit Responsibly

Using your credit responsibility is the best tip of them all. If you keep your credit cards with a low balance on them you will find that your credit score will continue to rise. By not using any of the credit that you have could actually hurt you.